Factors of production & Latin American economies

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  • 1. Factors that Influence Economic Growth 0Productive resources used to produce goods and services. 0Include: 0 Human Capital 0 Capital 0 Natural Resources 0 Entrepreneurship

2. Human Capital 0People who perform labor 0Example: 0Teacher 0Cashier 0Police Officer 0 Telemarketer 3. Capital 0Factories or machinery 0Example 0Copy Machine 0Tractor 0Coca Cola 4. Natural Resource 0Things that come from the land like minerals or trees. 0Examples 0Tree 0Diamonds 0Water 5. Entrepreneurship 0Ideas, innovations, and risks involved in starting a business. 0Example 0 Bill Gates 0 Steve Jobs 0 Donald Trump 0 Jay-Z 6. GDP 0 Economists measure a nations economic performance by this standard. 0 GDP- Gross Domestic Product 0 Value of goods and services produced by a country during a specific year. 0 Economists use the GDP to determine if a country is growing. 0 Brazil and Mexico have the highest GDP. 0 Haiti and Bolivia have struggling economies and low GDP 7. 0Investment in Human Capital- Giving training to employees or sending them to safety classes. 0Investing in Human Capital = Higher GDP 0Creates a smarter and more productive workforce, which leads to economic growth. How to Make your Economy GROW 8. Economies in Latin America 0Still have widespread poverty 0Many children work instead of attending schools 0Governments and Social Systems have started to take steps to improve the education of workers. 0Mexico- President called for a change in education system to better educate the children and in turn boost the economy. 9. Investment in Capital 0 Clear relationship between investment in capital and growing GDP. 0 Meaning: You buy new machines or computers and software = more productive workers 0 Then, increase in GDP! 0 Brazil has the highest investment in Capital equipment 0 In contrast- Haiti does not invest in capital for agriculture 10. Natural Resources 0 Natural Resources are the fuel for industry and a source of income when exported to other countries. 0 Brazil has rich mineral resource like iron ore (used to make steel), fertile soil, lots of trees, and rivers. 0 Mexico and Venezuela have oil deposits 0 Since these countries have valuable natural resources, countries have specialized in industries to process these resources for use. 11. Entrepreneurs 0They come up with new ideas and use human, capital, and natural resources to bring ideas to life and to the marketplace to sell! 0They are willing to take a risk, and share the risk by borrowing money from a bank or investor to start their business. 0They help economies by creating new goods or services. 12. Entrepreneurs in Latin America 0 Unemployment rate is high among young adults. 0 Countries are setting up courses and funding college classes to help develop entrepreneurs. 0 Governments and taxes make creating goods and services hard. 0 Example- it takes four months to get a business started in Venezuela. 0 Starting a business is a way to escape poverty in many countries. 13. Specialization 0 An efficient way to work, and the cost of the item is lower. 0 Specialization increases trade because a country can get what it needs at the lowest cost. 14. Opportunity Cost 0 Value of what is given up when a choice is made. 0 Example: Country A makes cars and chocolate. Country B only makes chocolate. Country A decides to only make cars because they are more profitable. Now they buy chocolate from Country B. Country As opportunity cost is the money they could have made from making chocolate. Country A decides it was better for them to specialize in cars than make both items. 15. Economic Systems Review 0 Traditional: Found in agricultural societies where people live the same way their parents and grandparents did. 0 Traditional economies are found in some places in Africa, Asia, and South America. 0 These people produce only enough to survive by farming, hunting, and gathering. 0 They make everything they need or barter for other necessities of live. 16. Economic Systems Review 0Command: The government controls what is produced and how it is produced. 0The government owns all resources and decides who gets the products. 0This decision can be based on class, a reward system, or waiting in line. 0An example is North Korea 17. Economic Systems Review 0Market: A market system is when the people make the economic decisions of what to buy and sell. 0People can own their own businesses and produce what they want. 0In a market system, supply and demand for a good or service determines what to produce and how to produce it. 0An example is the United States 18. Economic Systems Review 0Mixed: Almost all countries fall between a command and market economy. 0Government will own some resources and the people will control other resources. 0For example, in the U.S. the government controls schools, public colleges, postal service, and some power plants. 19. Brazils Economy 0Government controls some and so do the citizens 0Strong agricultural, mining, manufacturing, and service industry. 0Brazil has the strongest economy of all South American countries 0The government controls some areas such as healthcare and postal service 20. Cubas Economy 0The government controls all aspects of resources. 0The government owns all property and decides what and how much to produce. 0Cubas economy has struggled since the break up of the Soviet Union in the 1990s. 0The Soviet Union was Cubas main trading partner. 21. The End